Across the country, life has been disrupted by the coronavirus, as schools and those businesses deemed non-essential have been closed and countless individuals have been required to shelter in place. No matter who you are, you’ve no doubt felt the impact of Covid-19.
In addition to taking measures to safeguard employees according to CDC guidelines in an effort to control the potential spreading of the virus, employers may also encounter special financial issues as a result of this unprecedented situation. For a small businesses, defined by the Small Business Administration (SBA). as having 500 employees or less, incidents like Covid-19 can strain a business’s financial capacity to make payroll, maintain inventory and respond to market fluctuations. Such businesses may find financial help from the SBA, including help with capital access resources, inventory and supply chain.
On Friday, March 27th, the President signed into law the CARES (Coronavirus Aid, Relief, and Economic Security) Act, which contains $376 billion in relief for American workers and small businesses. The amount is intended to cover eight weeks of payroll expenses and any additional amounts for making payments towards debt obligations. The CARES Act sets the maximum loan amount under the Paycheck Protection Program as 250 percent of average monthly payroll costs, up to a total of $10 million.
In addition to traditional SBA funding programs, the CARES Act established several new temporary programs to address the COVID-19 outbreak. The first of which is the Paycheck Protection Program, which provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program. Economic Injury Disaster Loans (EIDLs) are loans available to small business borrowers that have suffered economic injury as a result of a pandemic or other disaster. An EIDL Loan advance can provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties. Next is the SBA Express Bridge Loan, which enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
The SBA works with a number of local partners to counsel, mentor, and train small businesses. The SBA has 68 District Offices, as well as support provided by its resource partners. Visit the Small Business Administration’s website for more information at sba.gov.
